INSERT to BW0501,Introducing the ArF Excimer Laser and All Solid-State Laser, the Next Generation of 193 nanometer Lasers For Steppers.

TOKYO--(BUSINESS WIRE)--Sept. 15, 1998--Ushio Inc. is proud to announce the successful development of the 193 nanometer (nm) light source Argon Fluoride (ArF) excimer laser as well as an all solid-state laser for use in state-of-the art steppers, (used in semiconductor lithography).

The ArF excimer laser is a next-generation product designed to supersede the 248nm light source wavelength Krypton Fluoride (KrF) excimer laser that has recently gained wide application as a component within steppers.

While the KrF excimer laser is suitable for use in the manufacture of semiconductor DRAMs at the megabit (10e6) level -- integrated circuit widths of approximately 0.25 micrometers (10e-6) -- the ArF excimer laser and our all solid-state laser have a range of over one gigabit(10e9) and can be used for circuit widths of less than 0.15 micrometers.

As the world's sole manufacturer of both the ArF excimer laser and the all solid-state laser for 193nm lithography, as well as a leading maker of lamps, Ushio will be in a strong position to extend its lead in the manufacture of light sources for steppers. The Company has already publicly announced the successful development of ArF excimer laser and all solid-state laser technology at the 4th International Symposium on 193nm Lithography (193 Seminar) which was held at Telfs, Austria on September 14-17. Ushio plans to make a further announcement about new technology associated with all solid-state lasers at the 59th Autumn Meeting, 1998; of The Japan Society of Applied Physics, to be held in Hiroshima on September 17.

The Background to Ushio's Development of the ArF Excimer Laser and All Solid-State Laser

Ushio's Achievements in the Stepper Light Sources Market

For many years Ushio has been a leading manufacturer of light sources for semiconductor exposure system. In line with growing demand for higher density semiconductors the Company has supplied and developed ultraviolet lamps such as g-line lamps and i-line lamps for each successive generation of semiconductors. Currently, Ushio boasts an 80% share of this market, reflecting the high reputation and outstanding level of trust we have established within the semiconductor industry. We anticipate that demand for lamps used in steppers, especially for rough-layer applications, will continue to increase steadily in line with rising levels of semiconductor production and the trend towards using high-density electronic devices.

Ushio's Achievements in the Development of Laser Technology

Ushio has been a pioneer in the development of lasers since their inception. Starting with carbon dioxide (CO2) and glass lasers developed during the nuclear fusion experiments at Osaka University, Ushio has been active in the commercial development of lasers for a wide range of applications. The Company has been at the forefront of developments involving the use of CO2 in equipment for laser marking, YAG lasers, ultraviolet solid-state lasers, Helium-Neon lasers and Helium-Cadmium lasers.

Product Outlines 193nm ArF Excimer Laser for Lithography Performance

Average Output            Spectrum Width        Repetition Rate   Gas Lifetime
  Power
   (W)                      (pm)                   (Hz)             (shots)
    5                      <0.7                  1,000              3x10e7

Special Features

The 193nm ArF excimer laser was developed with optimal reliability and low maintenance costs in mind.

-- As a result of an extensive research and development program, Ushio has achieved extended gas lifetime. High performance optical materials, a unique surface treatment and characterization (analysis) technology have been employed to prevent the release of impure gases into the discharge chamber.

-- Extended pulse width and high pulse stability have been achieved by adopting Ushio's original excimer lamp technology for the pre-ionization process.

-- Through a joint program with specialist manufacturers to develop high-performance long-life optical elements, Ushio has improved laser output power and stability.

-- The utilization of highly efficient and long-life solid-state power sources has also enhanced laser output power and stability.

-- A high level of wavelength stability has been achieved through the addition of an absolute wavelength monitor.

-- In-house manufacture of all major components enables Ushio to maintain complete control over product reliability.

Longer pulse width note: The ArF stepper lens is principally made of quartz. When a 193nm laser with a high peak power is irradiated onto this lens, a compaction of the lens occurs, leading to a shorter lens lifetime. The key technology behind the ArF stepper is the elongation of the temporal pulse length which reduces peak power and thereby alleviates compaction problems.

Through these innovations, Ushio has been successful in the swift development of a new product offering improved functionality. In addition, the 193nm ArF excimer laser offers a high level of reliability and low maintenance costs.

Future Strategy

To ensure the smooth transition from the KrF excimer laser to the ArF excimer laser, Ushio plans to confer with each stepper manufacturer to assess its individual development and production schedules. Our provisional schedule for the introduction of the ArF excimer laser is as follows.

-- April 1999: Commence user evaluations

-- October 1999: Begin shipment of prototype machines

-- April 2000: Commence full-scale production

Once steppers that contain ArF excimer lasers achieve widespread application, we forecast that total global manufacturing volume will amount to 500 units per annum. Ushio aims to win a 50% share of this market. Target unit price: Y90,000,000

A photograph of the 193nm ArF Excimer Laser is to be found at http://www.ushio.co.jp/epress/193e/arf.jpg

All Solid-State Laser for 193nm Lithography

The practical realization of all solid-state lasers for steppers has been keenly anticipated within the semiconductor lithography field because this technology offers advantages in terms of price, running costs, maintenance required and compactness, compared with excimer lasers.

Average Output Power             Spectrum Width              Repetition Rate
    (W)                         (pm)                        (kHz)
     1                                 0.1                          5

Special Features

-- The application of Ushio's high-quality nonlinear crystals (CLBO) for high power UV generation.

-- The application of fundamental lasers pumped by laser diodes jointly developed with a specialist manufacturer in the United States to drive nonlinear crystals and other turnable lasers.

-- The extremely narrow spectral line width means that this system is suitable for application with high NA steppers and makes higher performance steppers possible.

-- A high repetition rate with the same output power means smaller energy per pulse or smaller peak power, which extends the lifetime of the optical components for both the laser and the stepper.

These features pave the way for:

-- A possible reduction in maintenance costs

-- Shorter down time for steppers

-- Lower unit costs

Ushio has attained a world record for deep UV output power generated by a solid-state laser below 200nm.

Future Strategy

Based on Ushio's successful development of an all solid-state laser for practical application, the Company will promote further gains in both energy output (5W) and repetition rate (> about 50kHz). Moreover, following the introduction of the ArF excimer laser, the Company will introduce all solid-state lasers as a next-generation product for 193nm lithography. Target unit price: Y80,000,000 An Example of System Composition for Laser Emission is to be found at http://www.ushio.co.jp/epress/193e/scheme_e.gif -0-

Consolidated Statements of Income
                                                          Thousands
                                                            of U.S.
                             Millions of yen (Note 2)           dollars
                             1998      1997          1996              1998
Net sales                      Y71,598        Y67,600    Y60,551   $541,998
Cost of sales                       44,496         41,230     36,789    336,836
Gross profit                    27,102    26,370         23,762    205,162
Selling, general and
administrative expenses        14,900         13,044     12,082    112,793
(Notes 8 and 9)
Operating income            12,202    13,326         11,680     92,369
Other income (expenses):
Interest and dividend income 1,267     1,479          1,748      9,591
Interest expense              (549)        (734)         (1,023)    (4,156)
Other, net                       736        (275)           (539)     5,572
                             1,454         470            186     11,007
Income before income taxes,
 minority interests,
 amortization and equity
 in loss                       13,656         13,796     11,866    103,376
Income taxes (Note 7)                6,910          6,127      5,753     52,309
Income before minority
interests, amortization and
equity in loss                     6,746     7,669          6,113     51,067
Minority interests in
 earnings of
 consolidated subsidiaries          (16)           (12)        (14)         (121)
Amortization of excess
cost over net assets acquired          (11)            (8)         20          (83)
Equity in loss of unconsolidated
subsidiaries and affiliates          (37)            (4)       (148)         (280)
Net income (Note 11)               Y6,682        Y7,645            Y5,971    $50,583

See available notes to consolidated financial statements.